that's according to the new york times we'll talk about it in loose change let's get to today's capital account. in the u.s. as we watch this fiscal cliff charade it honestly sounds just so much like what we were hearing during the debt ceiling debate of two thousand and eleven when lawmakers were bickering and another ratings agency was threatening to drop the u.s. is aaa credit rating and then it of course did now that was met with much fanfare in the beginning but then not many direct consequences the dollar has strengthened against other currencies the u.s. has borrowed at record low rates since and maybe this whole fiscal cliff saga will play out in the exact same way and if another ratings agency in this case

downgrades the u.s. so what won't matter and with events that actually do change the contours of the game we don't actually know what these things will even look like until they happen and until they happen we have a really hard time entertaining the notion that they ever will like this guy at the press conference today was represented steve king and louie gohmert we have a bill here for britain no we won't we won't get downgraded of course not that's impossible until it happens and when it comes to preparing for these things the proper is often seen as a chicken little like people who were buying generators and stocking up on food in the northeast they may have seemed a bit paranoid until this so these effects blasted new york city causing damage and destruction never seen before in america's largest city. now when it comes to preparing for the fat tail to start wagging it's what one of our next guest compares to waiting for a train that may never come but miss that train and the opportunity is gone while

our other guest says that if that train were the state liquor right off that cliff good riddance they are eric fry and joel bowman of the daily reckoning and they are vote in the flesh in my studio here today thank you guys so much for being here and it's a pleasure to have let's start with going over a cliff getting on trains all the things of that story eric you said that preparing for kind of what did you see in us the ultimate egyptian train ride would be preparing for national adversity so first of all why you got to take on egypt and second of all seriously what is the metaphor with an egyptian train right now what is well being right all about picking on egypt is actually joel's fault oh is he started even said anything yet and it's already all right. the egyptian train is a joyride why there isn't one but he told me that he took over train ride in the. hours and hours and hours longer than expected but the bigger part of that is that

they went to the station at the appointed hour and trade in there i've several hours passed his dad got impatient started rattling cages very uncharacteristic for my father i just want to send a very patient individual we don't need to defend him today we'll let it go and eventually the train arrived but so i just. drew the metaphor that. when opportunities come especially preparing for adversity it's a little bit like that you know something's coming sort of but when you go to actually prepare for it. to be there waiting a long time and a lot of times the thing you expect doesn't arrive when you think it will and so many people just sort of give up on it and that's true of both a positive for tuna and also an opportunity to spend like they did last year for christmas so what do you look at that picture that has you concerned. well what's most alarming to me is that it's theater the us is becoming theater and the fiscal cliff discussion as you point out in the beginning is there's

a large theatrical performance belongs on broadway not here in washington it it's utterly irrelevant and so increasingly in the united states and the governments both national and local citizenry become obsessed with it or with discussions about things about shaving one hundred billion dollars when we're when we're facing trillion dollar deficits. about. you know controlling this liberty or struck me down. regulation when we should be figuring out how to how to liberate. capitalistic enterprise yeah yeah so there is that the same thing that you look at all are there any other specific things that you think are concerning to you when you talk about that long term trajectory the u.s. is on shore well you know erick speaks about and is quite correct i think to speak about the theater that is engrossing the american population as they you know you get fed the other side g.d.p. statistics. and unemployment index i'm

a little more instead of with what's going on behind that theater the militarization of the police you know the rise of the police state that those kind of things that you know i mean there are trains that you don't want to see leaving the station so it sounds like it's just as much about certain civil liberties as it is about the economic condition of the u.s. and i mean can you really separate the two because we're talking about preservation of your savings and being able to have the freedom to engage in enterprise right there linked their linked absolutely ok with without question so then what is do you think that there are because you both spend time outside of the country i know you guys were just in nicaragua looks pretty nice i know joe i think you live in argentina right it was all business in the. part of that will get to bounce later the sunsets are helpful back to. work ok we'll get to that later first i want to ask about argentina because argentina is somewhere both of you guys have you

know some experience with in the u.s. the u.s. is an empire people in the u.s. have not experienced the kind of economic turmoil that they have somewhere like argentina where they went through a default is there a difference in people's approach to risk and perceived risk and their desire and willingness to hedge against it somewhere like argentina where they've experienced that kind of thing firsthand versus the u.s. where they can hear about what could possibly go wrong but they haven't experienced that kind of economic turmoil to that extent. yeah you know i'd say i mean i i spent about five months of the year in in argentina and you know the understanding of the cycles that tend to happen you know they tend to happen every sort of ten years where you know you get major currency blowups. that. seceded by the kind of breakdowns and civil liberties that that we're talking about possibly. happening

here in the u.s. . the people are very very aware of what's going on and so a lot of their enterprises are kind of forced underground into what's so that just dismissed if we turn the black market. but i think the u.s. can learn a lot by looking at places like argentina black market that will do your thing and don't. you know i would say that from a from a governmental approach it's more of what you know not to do list if you will and you know i mean i think i think these things happen with predictability of regularity enough that you know you start to see some telltale signs. and in terms of national dominance i mean you don't really have a historical precedent where any one country can really stay on top forever and when you look at it different countries erik you've written about i don't. we have a chart we may or may not but you did a great chart comparing what happened to the credit ratings of countries in latin america that had junk ratings and now they have investment grade rating compared to

some of the pigs countries in europe which had investment grade ratings and now they're venturing into junk where they are at junk status so what do you think the takeaway is about that broadly and for the u.s. because let's remember the u.s. is the reserve currency it does have some different things going on here well the markets economy is our nation's follows cycles they are they are creatures that follow cycles and when we're in the middle of a of a boom cycle the u.s. enjoys a cult of two hundred your boom but it's still a cycle and so we aren't equipped or accustomed to dealing or doing ourselves as part of a cycle just any more than a twenty year old is used to think in terms of ok well at eighty i'm going to die or whatever you know they don't think that way we think well we're always going to twenty we're always going strong we're always going to great now and we're not and we're already in decline in my opinion. one thing that joe mentioned about about

argentina when you have a country like argentina where the government. checks off the what not to do list the population the populace many of them anyway or it understand the what to do list you know how to prepare for these serial crises that come through every every ten or twenty years here in the u.s. you know who's prepared that's a great point people don't have that president they don't really know what they should be doing what about some of the things that you've been writing about joel which are you're saying hey the state can't go off this cliff i don't care what i'm interested in or are some of these peer to peer solutions we're seeing like kickstarter for investing in and enterprise for like big point for currency that stores value so what do you think are the lessons of these things that have started up and what you think the opportunity is there right well actually i do care very much about the state going off the fiscal cliff i hope that it. and does it because then the rest of us can get on with creating the kind of things you just

mentioned and you know i chose three examples peer to peer examples. and what i kind of view as the new frontier eric mentioned a two hundred year bull market here in the united states well. you know. it started out as the frontier you know the united states was the frontier it was when it was where paranoid people came you know for gold. and then they fled here and so now i put this in paranoia people are still here but you know it's just because you're paranoid doesn't mean they're they're not. yes so this new frontier of you know peer to peer currency or crowdfunding or you know what have you this is where i think people who are actually going to be making a difference in the future are going to be going to be fleeing just quickly with something like that coin though when you don't have a government that can. taxation how does something like that have value and you

just have thirty seconds to to really expound on that concept well i think it's value is very much. is very much rooted in the fact that it is beyond the reach of government in that it's a largely decentralized or entirely decentralized currency that is reliant on the integrity of non-governmental individuals and i think you know with we've seen the integrity of governmental officials and what they do with the currency so i think this is a pretty good alternative to right now one thing we haven't talked about is how people in the u.s. could prepare or could diversify or could find some other economic opportunities when we get back we'll talk about nicaragua and some other examples of what people may do or are doing we'll have more of eric fry in job in at the daily reckoning in just a moment also still ahead opec is not the only cartel in town opec of maple syrup has been robbed that's right well discussed later at least change but first the closing market numbers.

i. would be soo much brighter than the moon. from the suns to the question. please please don't top teeth don't come. in.

all right let's get straight back with our get eric bryan job on one of the daily reckoning because we're going to talk about some ways to possibly hide your bad based on the risks that might be down the line for the west. one thing that they have both done is gone to nicaragua let's bring up

a picture we've got one eric for i took this himself oh yeah that's where you go to head your risk that's what i'm about. but in all seriousness guys what really is the opportunity nicaragua besides like a really nice vacation maybe nothing ok all right fair enough but that's not the worst thing it's number one thing it's not the worst thing that's true let's talk about some of the comparisons you've been writing about i'm ok if you want to talk about government debt and the u.s. spent on an opportunity i agree we can bring it up we've got what that looks like. there as. they have a government debt as a percent of g.d.p. going straight up. if you miss will show what happened in nicaragua where it's been going down but what do you think is kind of the takeaway there well. it's just an example it's just a place it's a place though that is coming off of a very very low base came of the civil war twenty five years ago and. it is a rapidly growing economy now. it's moving in the constructor direction the u.s.

is moving in the other direction so when you look at places around the world where you might possibly diversify not for flight purposes necessarily but just because here's an opportunity and here is what nicaraguan government debt as a percentage of g.d.p. has done it's gone down when you look at the two countries do you think there's anything to glean from that trend and one becoming more indebted and one becoming less so in terms of their trajectory you can just look at one data point i was to you when you parse together a lot of data points between the two countries you can see very opposite trends unemployment is growth is robust in the garage where it is tepid in the united states. crime stats are dramatically improving in the garage there. you know so so here in the u.s. . personal liberties i mean any comparison i look at are improving in that. almost everyone and they're not getting here so if you look around you say ok well the

world is not static never has been this dynamic and dynamic means that change is sometimes better sometimes worse well i don't want to be on the side of something that's getting worse if i can identify to be it's getting better so here's an example of something it's getting better but it's a tiny country right tiny country one of the poorest in the western hemisphere record to the united states which is one of the wealthiest nations but very different dynamics we can bring up unemployment just so we can see people show our audience what has happened with the u.s. unemployment rolling five year change versus nicaragua and so you know if you look at the tail end there it's been on the ascent in nicaragua and down in the u.s. i know that you're saying this is an example is this just the dynamic though of a developing nation that is going to coming from a very low bar and so it's beginning to grow and and not sort of thing versus a developed country that has had a crisis and already has developed yeah that's exactly correct going back to correct and as i observed in something i wrote the nicaragua is also too poor to

hassle you so person liberty standpoint they don't they don't have the resources to set up exhaustive agencies and invasive agencies and many many different ways to to control what you do so that's sometimes good sometimes bad that seems like every right up your alley. you know well that's that's the last openness of an impotent government is true you know. i mentioned a little while ago i think on. this show lauren just an anecdote and i was a teen where you know government infrastructure is a really breaking down and. you know people are finding immediate workarounds to it so much so that. customs checkpoints for example if the lines too long they rush the line right you know there's no standing there you know what if you're radiation . yes and for some moron to frisk you and your grandma and your kids right which is

the hyperactive government that we see here in the us i think that's something to avoid if at all possible right so when you when you talk about the lesson of nicaragua or any other lessons what do you really think people should take away in terms of what they could or should be doing if they're wanting to prepare for you know economic headwinds and the less well one thing i would say is i don't want to give the impression that ok nicaragua is some sort of paradise nirvana i know it's a dirt poor country with with a lot of problems. but as a as a template for something that investors should consider or individuals should consider it's a small government country with tremendous opportunity tremendous natural resources . tremendous dynamism and in many many areas we are a large government country that whose government is intent on constricting.

the ability to feed yourself so. put it on a scale i mean i'd rather have the poor country that is liberating its spirits and well go ahead you want to add to that well i was going to say the description eric was giving of nicaragua there well admittedly not. as one of the market and that's exactly the kind of description that you would have given to this country. when it was first founded it was very much an unknown entity it had. an almost no one present government and opportunity flourished but if you're making the case to anybody hey you know this is the new land of opportunity before it became the land of opportunity it would be very very difficult to forsee that right that's a different train that is the egyptian try and we come full circle back to the egyptians they're a go egyptian train you may be waiting for a long time but hey if you miss that thing you have missed your opportunity

gentlemen thank you so much for being on the show i really appreciate all of your insights. are going to try and figure out a way to head up nicaragua at some point my lifetime it looks beautiful. but you have been patient both my country and africa and i you know we can you know fashion a makeshift studio down there no too much trouble i like it i like it all right all right thanks so much you guys thank you. ira let's wrap up with loose change dimitri with a fiscal cliff negotiations continuing one thing that we hear about relentlessly is taxing the rich. the rich pay as a percentage of their income less than the middle class does we have

a tax system that needs entire over home and he made clear that the rich must pay their fair share meeting taxes will go up to the top two percent who would talk with no one talked about reform just tax the rich more ok well a new study is being written about today it came out of germany and some economists found that there is a correlation between higher taxes and higher life satisfaction or subjective wellbeing from what i understand the dimitri they kind of try to weigh trying to find a way to make an income. not a factor so just generally like taxation was correlated with better wellbeing but some of the things within a study that i was reading where that the lower percentage on the lower scale of income they were happier paying taxes because they get more out of their taxes in terms of services so what it was the people in the middle lower the lower income it leaves a lot of people in the middle of the most unhappy is that what it was well it's not really broken down like that they tried to figure out a way to kind of make it unusual for those things so that wasn't

a factor but then when you read through the report it has like kind of little anecdotes that are hard to totally understand because it's in parable research and it's very you know economics sounds stupid it's a waste this is a waste of money was a cynic was this government this is like funded by no you know what i'm not sure where they get the money i mean why do we need to sort of to know those so that people can paraded around and say see look people don't like having more art they're happier with the dumbest thing there were obviously no one likes paying taxes nobody no matter how much they make no one likes paying taxes and people are particularly satisfied with the services that they're getting for it too so yes this this study is a waste of money. that i don't know if it probably was it was like a self it was a derivative study it was a study that was drive the value from its own its own its results and i think the most biased of ever this is wrong it was done in germany and not in the us there were articles on the rim of the. yeah it's getting a lot of play in the us where there is a tax debate going on but very different always turn. who knows maybe let's leave

it there because this story i really want to get to cartels like opec make news but here is one you would never expect. billion dollar price of maple syrup over twenty million dollars worth of maple syrup was stolen from canada strategic reserves and back last summer. did you catch that she's talking about this strategic maple syrup reserves of course it is strategic reserves of maple syrup well they do you want to know why because this actually is a legit cartel so can it actually does control most of the market for maple syrup so in order to influence the price so that it doesn't get too low they actually hoard the syrup that get it to the price that they would want to be and so it's a cartel and from within like eighty million dollars worth of would be a knowledge of like a an energy crisis in the u.s. where like you make the top the strategic reserves yes well yes well you have a spike in maple syrup again aren't going to understand. what they're worried about

is that the prices would be too low so the producers couldn't get as much money for maple syrup that they would want to get what is the strategic reserve there so they have a supply to throw into the market in the event of a price spike i think it's perhaps but what from what i was reading it was seeming like more they were storing more of it there when there was a glut of it so that prices didn't get too low well they're constantly keeping the prices high then they're creating a huge glut of maple syrup and eventually we're going to have is going to be feeding animals medical service out of corn and we're going to another another health crisis because we're going to matter you know if it would be a health crisis i think maple syrup is oftentimes part of those cleanses that people do part of it's true as part of the lemon clomid so maybe those things are amazing i've heard i haven't done i couldn't even maple syrup reserve could be tapped into by the u.s. to actually the u.s. is you're overweight when i look on that i want to know if they can realize there are one in this country very probably lies and i want to have a hard time seeing them telling people go on healthy clones don't stop using pharmaceutical drugs and the thing is if they. did but immediately but i think that

the fact that they got robbed i think they kind of had it coming because if they're really controlling the price and the market for me. i think that they kind of deserve to be robbed well i'd like to see what happened i mean did that we did was there or is there a spike in attendance i hop could explode i think i think i just right around chicago will have to leave it there crowded time so thank you so much for watching be sure to come back tomorrow and in the meantime you know you can follow me on twitter at lauren lyster you can like our facebook page there comment you can watch us on you tube or you can watch us on hulu and from everyone here thank you so much for watching come back tomorrow and have yourself a very great night. live

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